True Foreign Aid

by Rep. Ron Paul

A recent Hudson
Institute study [.pdf] found that, last year, American citizens voluntarily
contributed three times more to help people overseas than did the United States
government. This should not surprise us at all, as Americans are generous to
those in need, whether here or abroad. There are so many moral, religious, and
human reasons to help our fellow men and women in need. It is only when government
gets in the way and tries to crowd out private charity that problems arise.

There are good reasons why the U.S. Constitution does not allow our government
to send taxpayer money overseas as foreign aid. One of the best is that coerced
"charity" is not charity at all, but theft. If someone picks your
pocket and donates the money to a good cause, it does not negate the original
act of theft.

There are also practical reasons to oppose governmental foreign aid. Though
it may be given with the best intentions, government agencies simply cannot
do the kind of job that private charities do in actually helping people in need.
Government-to-government assistance seldom helps those really in need. First,
because it comes from governments, it usually has political strings attached
to it, and as such is really a cover for political interventionism. Take our
own National Endowment for Democracy, for example. The "aid" money
it spends is usually spent trying to manipulate elections overseas so that a
favored foreign political party wins "democratic" elections. This
does no favor to citizens of foreign countries, who vote in the hope that they
may choose their own leaders without outside interference.

Likewise with the so-called Millennium Challenge Account, which sends U.S.
aid to countries that meet U.S.-determined economic reform criteria. The fact
is, countries that enact solid economic policies will attract many times the
amount of private foreign investment on international capital markets than they
receive through the Millennium Challenge program.

Another problem is that when a government gives aid to another government,
there are so many layers of middlemen involved that by the time the actual aid
trickles down to those in need it is a small fraction of the original amount
given. Not to mention that much of this aid finds its way into the pockets of
corrupt foreign leaders.

Private assistance organizations, on the other hand, are more subject to market
forces and thus much more effective. When Americans feel motivated to part with
their hard-earned money to help someone overseas, they want to make sure it
goes only to the most effective charities. Bad news travels fast, and private
charities are unlikely to send their resources where they are likely to be wasted,
because their contributions would soon dry up. We all recall what happened several
years ago when it was revealed that the top management of a major charity organization
was paid extremely high salaries: people stopped sending money. The problem
corrected itself.

Sadly, this does not happen when government aid is mismanaged. More often than
not, the very government agencies that mismanaged the assistance in the first
place come back to Congress for a budget increase to solve the problem they
created.

So we should be happy to hear that Americans are willing to give so much to
help those less fortunate in foreign lands. And we should think hard about all
the good we could do both at home and abroad if our government did not take
so much from us for its ineffective and wasteful foreign aid priorities. True
charity is never coerced.